Early Look

Wednesday, February 10, 2021

Futures	Up/Down	%	Last
Dow	104.00	0.33%	31,382
S&P 500	14.25	0.36%	3,919
Nasdaq	55.25	0.40%	13,735

 

 

Another day, another record for U.S. futures as the broader market narrative remains the same – the path of least resistance remains sharply higher on fiscal stimulus hopes, vaccine rollouts, better earnings and a dovish Fed, offering market participants no reason to show fear (for now) when it relates to surging market multiples, rising Treasury yields, or pockets of bubbles (Bitcoin). Oil extended its rally for a ninth day, its longest winning streak in two years, supported by producer supply cuts and hopes that vaccine rollouts will drive a recovery in demand (and follows bullish API inventory data overnight). In the first stimulus drafts for budget reconciliation, senior House Democrats proposed scaling down unemployment benefits and stimulus checks from the president’s initial $1.9 trillion relief proposal, but they did not cut income thresholds for the direct payments as sharply as Republicans previously suggested. Markets await inflation data this morning in the form of Consumer Prices (CPI).

 

Major averages ended mixed on Tuesday as the Nasdaq Composite edged higher for a 4th straight day to end at a fresh record high (above 14K), while the S&P 500 and Dow slipped in the final minutes to snap their 6-day winning streaks as stimulus hopes remain in focus. The reflation trade continues as energy, financials and materials among market leaders, helping the SmallCap Russell 2000 to another all-time high of its own, topping the 2,300 level (rising a 7^th straight session). Short interest squeeze names of last week have come crashing down to earth as GameStop (GME) shares settled at $50.31, and has now lost about 90% of its value in just 8 trading days from its Jan 28 intraday high of $483.00. At the same time, the new mania in markets is Bitcoin, topping the $48,000 level and sending any name that mines, invests or is part of the blockchain sharply higher again. In Asian markets, The Nikkei Index rose 57 points to 29,562, the Shanghai Index gained 51 points to 3,655 and the Hang Seng Index advanced 562 points to move back above the 30,000 level. In Europe, the German DAX is higher by a few points to 14,020, while the FTSE 100 gains 25 points to 6,550.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -4.36 points, or 0.11%, to 3,911.23

·     The Dow Jones Industrial Average fell -9.93 points, or 0.03%, to 31,375.83

·     The Nasdaq Composite gained 20.06 points, or 0.14%, to 14,007.70

·     The Russell 2000 Index advanced 9.24 points, or 0.40% to 2,299.00

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM EST      Consumer Price Index (CPI) MoM for Jan…est. 0.3%

·     8:30 AM EST      CPI Ex: Food & Energy (core) MoM for Jan …est. 0.2%

·     8:30 AM EST      Consumer Price Index (CPI) YoY for Jan…est. 1.5%

·     8:30 AM EST      CPI Ex: Food & Energy (core) YoY for Jan…est. 1.5%

·     10:00 AM EST    Wholesale Inventories MoM for Dec…est. 0.1%

·     10:30 AM ET      Weekly DOE Inventory Data

·     2:00 PM EST       Federal Budget for January

 

Earnings Calendar:

·     Earnings Before the Open: AEIS, BBGI, BDC, BG, BXMT, CDW, CHEF, CIM, CME, DBD, EEFT, GM, IG, IQV, KO, MCFT, TMHC, UAA, VERU

·     Earnings After the Close: AEMD, AKR, ASGN, AVLR, BE, BHF, BLBD, CERN, CINF, CXW, EFX, EGAN, ELY, EQR, EXEL, FLDM, FR, IFF, IRBT, IVC, KNL, LUMN, MC, MGM, MOH, NGVT, NLY, ORLY, PAYC, PI, QLYS, RM, RNWK, RUSHA, SONO, TLND, TRUP, TTGT, TYL, VNDA, WU, XPO, ZG, ZNGA

 

Other Key Events:

·     Cowen Aerospace, Defense & Industrial Conference (virtual), 2/9-2/11

·     Goldman Sachs Technology & Internet Conference (virtual), 2/10-2/11

·     KBW Inc. Financial Services Symposium (virtual), 2-10-2/12

·     Stifel Transportation & Logistics Conference (virtual), 2/9-2/10

·     Annual WORLDSymposium (Lysosomal Diseases), 2/8-2/12

 

 

Macro	Up/Down	Last
Nymex	0.30	58.66
Brent	0.39	61.48
Gold	2.50	1,840.86
EUR/USD	0.0008	1.2127
JPY/USD	0.15	104.74
10-Year Note	+0.027	1.16%

 

 

Sector News Breakdown

Consumer

·     Lyft Inc. (LYFT) Q4 adj net loss $185.3M vs. est. $224.7M loss; Q4 revs $569.9M vs. est. $562.5M; qtrly active riders 12.55 mln, down 45.2%; qtrly revenue per active rider $45.40, up 2.3%; recovery trends seen in q3 2020 continued into q4 2020; said Q1 continues to be uncertain primarily due to covid-19 headwinds; qtrly contribution margin 55.5%, up 1.5 pct points

·     Mattel (MAT) Q4 adj EPS 40c vs. est. 23c; Q4 revenue $1.63B vs. est. $1.58B; Q4 gross margin 51.4%; Q4 Net Sales in the North America segment increased 13% as reported and in constant currency, versus the prior year’s fourth quarter and Net Sales in the International segment increased 7% as reported, and 8% in constant currency.

·     Urban Outfitters (URBN) qtrly total company net sales decreased 6.9% over same period last year to $1.09B (vs. est. $1.1B); qtrly comparable retail segment net sales decreased 7% and qtrly comparable retail segment net sales increased 6% at Free People and decreased 6% at Urban Outfitters

·     Bunge (BG) Q4 adj EPS $3.05 vs. est. $1.82; Q4 revenue $9.28B vs. est. $10.92B; sees FY21 adjusted EPS at least $6.00 vs. est. $5.53; in non-core, full-year results in sugar and bioenergy joint venture are expected to be a positive contributor; in edible oils, full-year results are expected to be comparable to last year

·     Electric vehicle startup Rivian Automotive, which is backed by Amazon (AMZN) and Ford (F), is aiming to go public as soon as September of this year at a valuation of roughly $50B and perhaps more – Bloomberg

·     Limbach Holding (LMB) 1.784M share Secondary priced at $12.00

 

Energy

·      The American Petroleum Institute (API) said weekly crude inventories fell by 3.5 million barrels to about 474.1 million barrels; crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.4 million barrels; gasoline stocks rose by 4.8 million barrels, and distillate fuel inventories, which include diesel and heating oil, fell by 487,000 barrels

·     Enphase (ENPH) Q4 EPS 51c vs. est. 40c; Q4 revenue $264.8M vs. est. $254.8M; sees Q1 revs $280M-$300m vs. est. $259.8M; Cash flow from operations of $84.2 million; ending cash balance of $679.4 million; GAAP gross margin of 46.0%; non-GAAP gross margin of 40.2%

·     Green Plains (GPRE) Q4 EPS loss (53c) vs. est. loss (38c); Q4 revs $478.76M vs. est. $681.84M;

·     Helmerich & Payne (HP) Q1 adj EPS loss (82c) vs. est. loss (79c); Q1 revenue $246M vs. est. $236.12M; North America Solutions segment exited the first quarter of fiscal 2021 with 94 rigs doubling the lows experienced in August 2020 and up roughly 35% during the quarter; ended the quarter with $524 million in cash and short-term investments; sees FY cap-ex still expected to be approximately $85 to $105M

·     Plains All American (PAA) 4Q adj EPS $0.29 vs. est. $0.33 on revs $5.96B vs. est. $6.13B; guides FY21 adj EPS $0.95 vs. est. $1.28

·     Ballard Power (BLDP) 9.46M share Spot Secondary priced at $37.00

 

Financials

·     Artisan Partners Asset Management Inc. (APAM) assets under management as of January 31, 2021 totaled $156.5 billion. Separate accounts accounted for $81.4 billion of total firm AUM, while Artisan Funds and Artisan Global Funds accounted for $75.1 billion.

·     Arch Capital (ACGL) Q4 operating EPS 56c vs. est. 38c; Q4 gross premiums written were 19.6% higher YoY while net premiums written were 21.6% higher than in the 2019 fourth quarter

·     Assurant (AIZ) Q4 operating EPS $1.82 vs. est. $2.08; Q4 revenue $2.555B vs. est. $2.54B; expects to provide FY 2021 outlook following outcome of evaluation of strategic alternatives, including potential sale, of global preneed

·     CNO Financial (CNO) 4Q EPS $0.61 vs. est. $0.59, says acquires Directpath for about $50Mm with additional possible earn-out

·     Fiserv (FISV) 4Q adj EPS $1.30 vs. est. $1.29 on revs $3.83B vs. est. $3.73B; guides FY21 internal revs +8-12%, adj EPS $5.30-5.50; outlook assumes no significant extension of Covid impacts beyond 1H21

·     Genpact (G) Q4 adj EPS 51c vs. est. 49c; Q4 revenue $951M vs. est. $934.47M; raises share repurchase authorization by $500M and dividend by 10% to 10.75c per share; sees FY21 adjusted EPS $2.26-$2.29 vs. est. $2.27

·     Virtus Investment Partners, Inc. (VRTS) reported total assets under management (AUM) as of January 31, 2021 of $132.9 billion.

·     Voya Financial (VOYA) Q4 adj EPS $1.90 vs. est. $1.47; total company assets under management and administration were $700 bln as of dec. 31, 2020; Board of directors authorizes repurchase of an additional $1 billion of Voya common stock

·     Welltower (WELL) expects Q1 normalized FFO of 71c-76c as midpoint of 73.5c comes in slightly higher than the average analyst estimate of 73 cents; due to the continued uncertainty caused by the COVID-19 pandemic, the REIT is only issuing guidance for Q1 of 2021.

·     The New York Stock Exchange may leave New York State if Albany imposes a transfer tax on stock sales, the president of the Intercontinental Exchange (ICE)-owned exchange operator said in an op-ed in The Wall Street Journal

 

Healthcare

·     Genfit (GNFT) announces publication of positive results from the phase 2 clinical trial evaluating elafibranor in patients with PBC in the Journal of Hepatology

·     QIAGEN (QGEN) 4Q net sales $571.2Mm vs. est. $548.9Mm, EPS $0.68 vs. est. $0.65; reaffirms expectations for further growth in 2021

·     Tenet Healthcare (THC) 4Q net revs $4.9B vs. est. $4.89B; guides FY21 adj EPS $3.52-4.81 vs. est. $3.11, sees adj EBITDA $2.9-3.1B vs. est. $2.89B, says to retire $478Mm of 7% senior unsecured notes due 2025

·     Usana Healthcare (USNA) 4Q EPS $1.87 vs. est. $1.43 on sales $310.5Mm vs. est. $291.5Mm; guides FY21 EPS $6.00-6.45 vs. est. $5.77, sees FY21 net sales $1.21-1.27B vs. est. $1.19B

·     Eli Lilly (LLY) received FDA emergency use authorization for its combination of bamlanivimab and etesevimab for COVID-19

·     Autolus Therapeutics (AUTL) 14.29M share Secondary priced at $7.00

·     Biophytis (BPTS) 1.2M share IPO priced at $16.75

·     KemPharm (KMPH) files to sell 7.94M shares of common stock for holders

·     Vallon Pharmaceuticals (VLON) 2.25M share IPO priced at $8.00

 

Industrials & Materials

·     FMC Corp. (FMC) Q4 adj EPS $1.42 vs. est. $1.44; Q4 revenue $1.15B vs. est. $1.16B; sees FY21 adj EPS $6.65-$7.35 vs. est. $7.22; sees FY21 revenue $4.9B-$5.1B vs. est. $4.98B; -full-year 2021 free cash flow is expected to be in range of $530 to $620 mln; expects to repurchase $400 to $500 mln of shares in 2021, beginning in q1

·     Manitowoc (MTW) Q4 adj EPS 19c vs. est. 9c; reports Q4 revenue $430.3M vs. est. $435.76M; Q4 order intake totaled $508.6 million, and we ended the year with $543.2 million in backlog; not giving 2021 guidance due to ‘significant’ uncertainty

·     O-I Glass (OI) Q4 adj EPS 40c vs. est. 36c; Q4 revenue $1.5B vs. est. $1.48B; announces $150M share repurchase program; sees FY21 adjusted EPS $1.55-$1.75 vs. est. $1.66; says cash provided by continuing operating activities is expected to approximate $615 million or higher in 2021; anticipates 2021 free cash flow will approximate $240 million

·     Steel producer Thyssenkrupp raised its full-year outlook, boosted by a recovery at its steel unit that could strengthen the case for a spin-off. Thyssenkrupp’s steel division expects to nearly break even this fiscal year, compared with a low triple-digit million euro loss previously expected.

 

Media & Telecom

·     Match Group (MTCH) to acquire Hyperconnect for $1.725B in cash and stock

·     Twitter (TWTR) Q4 adj EPS 38c vs. est. 31c; Q4 revenue $1.29B vs. est. $1.19B; sees q1 rev $940M-$1.04B vs. est. $965.1M; average monetizable daily active usage growth of 27% to 192 mln in Q4; Q4 total ad engagements increased 35%; qtrly cost per engagement decreased 3%; Q4 MAUs 37 mln vs 31 mln; qtrly average international MDAU was 155 mln vs 121 mln; expect total costs & expenses to grow 25% or more in 2021, ramping in absolute dollars over course of the year; sees year cape $900M-$950M

 

Technology

·     A10 networks (ATEN) 4Q adj EPS $0.18 vs. est. $0.15 on revs $62.7Mm vs. est. $63.3Mm

·     Alteryx (AYX) Q4 non-GAAP EPS 62c vs. est. 31c; Q4 revenue $160.5M vs. est. $152.69M; Ended the quarter with $492.6 million in annual recurring revenue (ARR), an increase of 32% YoY; announced strategic alliances with Snowflake Inc. and HCL America Solutions Inc.; sees Q1 non-GAAP EPS loss (25c)-(22c) vs. est. (1c) and revs $104.0M-$107.0M vs. est. $119.1M; sees FY21 revs $555-565Mm vs. est. $567.2Mm

·     Akami (AKAM) Q4 adj EPS $1.33 vs. est. $1.31; Q4 revenue $846M vs. est. $829.46M; GAAP operating margin of 21% and non-GAAP operating margin of 31%, exceeding 30% goal; Cloud Security Solutions revenue exceeded $1 billion and grew 25% year-over-year; announced an organizational realignment that is intended to position the company to become even more agile in delivering its market-leading solutions for making the internet fast, intelligent and secure for major enterprises

·     Ceridian HCM (CDAY) Q4 adj EPS 9c vs. est. 7c; Q4 revs $222.8M vs. est. $217.5M; sees Q1 revs $220M-$224M below the $230.9M est.; sees Q1 adj Ebitda $32M-$36M; not providing year guidance; Dayforce recurring services revenue was $130.9 million and $500.2 million for the fourth quarter and full year of 2020, respectively, an increase of 14.5% and 16.6%

·     Cisco Systems (CSCO) 2Q adj EPS $0.79 vs. est. $0.76 on revs $12B vs. est. $11.92B; guides 3Q adj EPS $0.80-0.82 vs. est. $0.81, sees 3Q revs +3.5-5.5% vs. est. +3%

·     Computer Programs (CPSI) 4Q adj EPS $0.55 vs. est. $0.70 on revs $55.8Mm vs. est. $69.3Mm, bookings $21.2Mm; guides FY21 recurring revs growth at higher end of +5-8%, total expected revs $270-280Mm vs. est. $281.6Mm, sees adj EBITDA mgn $16.5-17.5% vs. est. 18.16%

·     Model N (MODN) 1Q adj EPS $0.16 vs. est. $0.07 on revs $42.7Mm vs. est. $40.4Mm, qtrly subscription revs $31.4Mm +12%; guides 2Q total revs $46-46.5Mm vs. est. $41.9Mm; sees FY21 adj EPS $0.10-0.15 vs. est. $0.31, sees FY21 revs $184-186Mm vs. est. $171.2Mm

·     Rapid7 Inc. (RPD) Q4 EPS loss (7c) vs. est. loss (8c); q4 revs $113.2M vs. est. $108.6M; qtrly annualized recurring revenue (ARR) of $432.9 mln, an increase of 28% year-over-year;

·     Yelp Inc. (YELP) Q4 EPS 27c vs. est. 27c; Q4 revenue $233.2M vs. est. $228.31M; sees FY21 net revenue $985M-$1.005B vs. est. $979.22M and sees FY21 adjusted EBITDA $150M-$170M; says “we are confident in our ability to return to sustainable revenue growth in 2021”

·     Viant (DSP) 10M share IPO priced at $25.00